Discussion: View Thread

Hi Rich:

Your conjecture places you in excellent company.  George Stigler once said: "Men should, in general, enter smaller companies, the greater their ability."  However, since output equals effort times ability, we must also assess the impact of firm size on effort.  There is a vast literature in labor economics on the monitoring and evaluation of worker effort and its resulting impact on wages and worker productivity (e.g., papers by Garen, Lazear). These papers model worker preferences for wage and leisure and more specifically, their incentives to supply higher levels of effort.  George Hendrikse published a theoretical paper in Small Business Economics (see reference below), which reported that more productive workers tend to migrate to small firms, due to free riding at large firms (which seems plausible, since employees are often working in teams these days, and monitoring is more difficult at large firms).  An empirical implication of his model, is that industries with both small and large firms will be more productive than an industry containing only large companies.  This finding could easily be confirmed with establishment-level data and the rest of your conjectures could be tested with the new generation of matched employer-employee data (I have several papers using these data). 

2) Another relevant stream of research is the work by Zoltan Acs and David Audretsch, who conducted a series of empirical studies at the firm level (see references below) demonstrating that small firms tended to innovate at a faster rate than large firms (in the manufacturing sector).  This finding varied substantially across manufacturing industries (e.g., in the computer industry and process control instruments, entrepreneurial companies were the key source of critical innovations, while in pharmaceuticals and aircraft, large companies dominated innovative activity). 

Best regards,

Don

Dr. Donald S. Siegel

Dean and Professor

School of Business

University at Albany, SUNY

1400 Washington Avenue

Albany, NY 12222

DSiegel@uamail.albany.edu

http://www.albany.edu/business/

http://www.albany.edu/business/faculty_siegel.shtml

http://econpapers.repec.org/RAS/psi32.htm

References

Acs, Zoltan J. and David B. Audretsch (1987), "Innovation, Market Structure and Firm Size." Review of Economics and Statistics 69(4), 567–575.

Acs, Zoltan J. and David B. Audretsch (1988), "Innovation in Large and Small Firms: An Empirical Analysis." American Economic Review 78(4), 678–690.

\

Acs, Zoltan J. and David B. Audretsch (1990), Innovation and Small Firms. Cambridge, MA: MIT Press.

Acs, Zoltan J. and David B. Audretsch , eds. (1993), Small Firms and Entrepreneurship: An East–West Perspective. Cambridge, MA: Cambridge University Press.

Hendrikse, George W. J. (1992), "Selection of Workers and Firm Heterogeneity," Small Business Economics, 4(2), 105-111.  

Stigler, George J. (1962), "Information in the Labor Market', Journal of Political Economy 70, 94-105.

Please post on Entrepreneurship listserv...

Seeking info about employees of start-ups & small businesses:

I am looking for any publications that might provide evidence that employees of start-ups and/or small businesses work harder (or work longer hours, or have higher productivity, or work faster) than their counterparts at larger, more established companies.  

Any type of evidence is OK -- systematic or anecdotal.  

Any source is OK -- research, journalism, memoirs, etc.

I am also looking for any research literature that might attempt to explain WHY this phenomenon occurs -- i.e., why employees work harder, longer, faster, or more productively at start-ups or small businesses than at larger, more established companies.

Any type of research is OK -- theoretical or empirical

Thanks in advance for any guidance you can provide.

Best regards,

Rich Makadok

--------------------------

Richard J. Makadok

Associate Professor

Goizueta Business School

Emory University

1300 Clifton Road

Atlanta, GA 30322-2710

voice (404) 727-8639

fax (404) 727-6313

Rich_Makadok@bus.emory.edu

http://www.bus.emory.edu/Rmakadok/Professional/

Hi Rich:

Your conjecture places you in excellent company.  George Stigler once said: "Men should, in general, enter smaller companies, the greater their ability."  However, since output equals effort times ability, we must also assess the impact of firm size on effort.  There is a vast literature in labor economics on the monitoring and evaluation of worker effort and its resulting impact on wages and worker productivity (e.g., papers by Garen, Lazear). These papers model worker preferences for wage and leisure and more specifically, their incentives to supply higher levels of effort.  George Hendrikse published a theoretical paper in Small Business Economics (see reference below), which reported that more productive workers tend to migrate to small firms, due to free riding at large firms (which seems plausible, since employees are often working in teams these days, and monitoring is more difficult at large firms).  An empirical implication of his model, is that industries with both small and large firms will be more productive than an industry containing only large companies.  This finding could easily be confirmed with establishment-level data and the rest of your conjectures could be tested with the new generation of matched employer-employee data (I have several papers using these data). 

 

2) Another relevant stream of research is the work by Zoltan Acs and David Audretsch, who conducted a series of empirical studies at the firm level (see references below) demonstrating that small firms tended to innovate at a faster rate than large firms (in the manufacturing sector).  This finding varied substantially across manufacturing industries (e.g., in the computer industry and process control instruments, entrepreneurial companies were the key source of critical innovations, while in pharmaceuticals and aircraft, large companies dominated innovative activity). 

 

Best regards,

Don

 

Dr. Donald S. Siegel

Dean and Professor

School of Business

University at Albany, SUNY

1400 Washington Avenue

Albany, NY 12222

DSiegel@uamail.albany.edu

http://www.albany.edu/business/

http://www.albany.edu/business/faculty_siegel.shtml

http://econpapers.repec.org/RAS/psi32.htm

 

References

Acs, Zoltan J. and David B. Audretsch (1987), "Innovation, Market Structure and Firm Size." Review of Economics and Statistics 69(4), 567–575.

 

Acs, Zoltan J. and David B. Audretsch (1988), "Innovation in Large and Small Firms: An Empirical Analysis." American Economic Review 78(4), 678–690.

\

Acs, Zoltan J. and David B. Audretsch (1990), Innovation and Small Firms. Cambridge, MA: MIT Press.

 

Acs, Zoltan J. and David B. Audretsch , eds. (1993), Small Firms and Entrepreneurship: An East–West Perspective. Cambridge, MA: Cambridge University Press.

 

Hendrikse, George W. J. (1992), "Selection of Workers and Firm Heterogeneity," Small Business Economics, 4(2), 105-111.  

 

Stigler, George J. (1962), "Information in the Labor Market', Journal of Political Economy 70, 94-105.

From: Entrepreneurship Division Listserv [mailto:ENTREP@AOMLISTS.PACE.EDU] On Behalf Of Rich Makadok
Sent: Friday, October 23, 2009 6:54 PM
To: ENTREP@AOMLISTS.PACE.EDU
Subject: [ENTREP] Seeking info about employees of start-ups & small businesses

 

Please post on Entrepreneurship listserv...

 

Seeking info about employees of start-ups & small businesses:

 

I am looking for any publications that might provide evidence that employees of start-ups and/or small businesses work harder (or work longer hours, or have higher productivity, or work faster) than their counterparts at larger, more established companies.  

 

Any type of evidence is OK -- systematic or anecdotal.  

Any source is OK -- research, journalism, memoirs, etc.

 

I am also looking for any research literature that might attempt to explain WHY this phenomenon occurs -- i.e., why employees work harder, longer, faster, or more productively at start-ups or small businesses than at larger, more established companies.

 

Any type of research is OK -- theoretical or empirical

 

Thanks in advance for any guidance you can provide.

 

Best regards,

Rich Makadok

 

--------------------------

Richard J. Makadok

Associate Professor

Goizueta Business School

Emory University

1300 Clifton Road

Atlanta, GA 30322-2710

voice (404) 727-8639

fax (404) 727-6313

Rich_Makadok@bus.emory.edu

http://www.bus.emory.edu/Rmakadok/Professional/

 

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